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Port balks at Hayden price tag

City planners outline land-use demands to annex, rezone island


by: TRIBUNE FILE PHOTO - The proposed marine trade terminals would largely be built on the sand-covered part of the island, used to dump material dredged from the Columbia River. The Port of Portland, turning up the political heat before its proposed West Hayden Island annexation goes before the City Council, says the environmental conditions suggested by the city Planning and Sustainability Commission render its proposed marine trade terminals financially “undevelopable.”

The newest planning commission terms would cost $69.6 million to $84.2 million just to prepare a 300-acre site for an outside developer to build two trade terminals, says Bill Wyatt, port executive director. That amounts to $10.38 to $11.84 per square foot, he says, when the going price for Columbia River port land is $5 to $7 a square foot.

“This has got to make economic sense,” Wyatt says. At that price, “we wouldn’t pursue annexation.”

The port is particularly concerned about a new proposal requiring it to shell out $18 million to replace lost floodplains on the island.

Wyatt is banking on convincing new Mayor Charlie Hales and the rest of the Portland City Council to override the planning commission’s expected conditions, lured by the 2,300 to 4,000 jobs the port estimates will be created at the trade terminals and related spinoff work.

The average West Coast longshoreman earns $130,000, Wyatt says, with a benefits package of $97,000. There’s also growing demand for riverbound trade in the Columbia River, he says, citing a voracious appetite in China for soybeans, as one example.

Wyatt says he’ll be “pretty comfortable” with Hales’ ultimate decision on the project because the mayor “really gets” the need to attract jobs.

State land-use laws also require the city to maintain a 20-year supply of developable land to meet future needs, and a recent analysis found the city needs 635 more acres of industrial lands.

Annexing West Hayden Island could help the city fill half of that shortfall, and closing that gap may be necessary to win state approval of the city’s revised comprehensive land use plan, Wyatt notes.

“This City Council, I suspect, will be more sensitive to that industrial land gap,” Wyatt says.

Paying for flooded land

Former Mayor Sam Adams mounted a failed, frenetic effort to get West Hayden Island annexed and rezoned before leaving office last December.

Adams succeeded in getting the port to restrict its industrial development to 300 acres and set aside 500 acres on the island for open space and recreation. He also pressed the port to aid residents of nearby manufactured homes who may be harmed by diesel fumes, noise and other impacts from the industrial activity. But Adams couldn’t bridge all the gaps between the port and the project’s main opponents: Hayden Island residents and the Audubon Society of Portland.

Since Adams left office, planning commissioners have devoted several meetings to West Hayden Island, and have retooled various terms and conditions. Now commissioners appear close to finalizing a mix of environmental and other conditions before endorsing annexation of the 800-acre site into the city and rezoning it for industry. They are set to hold a work session on May 28, which may indicate the final positions commissioners will take. Then a formal vote is planned in June or perhaps July.

After that, the final decision would rest with the City Council.

The Audubon Society has opposed West Hayden Island development for years and says the planning commission proposal doesn’t force the port to pay for all the environmental damage it will cause to the relatively undeveloped western half of the island.

“If this is going to be such an economic driver for the community, it ought to pay for its impact,” says Bob Sallinger, Audubon conservation director.

Audubon wants the port to replace 100 more acres of lost floodplain than the 200 acres that may be required by the planning commissioners.

Audubon also is alarmed by provisions that if the port doesn’t get the money to do the required mitigation to make up for damaged natural areas, it could walk away from its commitments, after getting the land annexed into the city.

“There’s still a huge escape hatch for the Port of Portland,” Sallinger says. “They want to get this property annexed and rezoned, and basically they’re kicking the can down the road when it comes to the environment and the community.”

Eric Engstrom, a principal planner for the city Bureau of Planning and Sustainability, dismissed Sallinger’s fear that the port could walk away from the deal if funding isn’t procured. “I don’t view that as an escape clause; that’s something that’s used in agreements like this.”

Engstrom also empathizes with the port’s contention that the costs are getting unaffordable to make the development pencil out.

“I agree with them,” he says. “If it was just them trying to pull this off, they couldn’t.”

However, the city is demanding a variety of conditions for the project, including public recreation and helping aggrieved neighbors. There’s multiple goals and interests in play, Engstrom says, so it’s fair to rely on multiple funding sources.

Ordinarily, the Portland area requires a strict “balanced cut and fill” standard when it comes to protecting floodplains. For every acre of land filled in a floodplain, another acre must be cut out elsewhere, so flood waters have a place to spread without damaging built-up areas.

However, Engstrom says, Metro granted an exemption from that standard for a select few properties, including west Hayden Island and the city’s South Waterfront redevelopment. In those cases, he says, that was a recognition of the economic opportunities available from those sites.

Instead of cut-and-fill, which Audubon says might cost the port $100 million to $200 million, planning commissioners suggested a cheaper alternative.

“You can pay people to let their land be flooded,” Engstrom says. In essence, a farmer or other landowner would agree to remove a levee or other barrier in flood conditions, to accommodate raging waters of the Columbia.

But the port is balking at the $18 million price tag. The port also opposes a Planning Commission proposal to maintain city regulatory oversight over the port’s wetland improvements on West Hayden Island.

While Wyatt appears confident about the port’s chances of prevailing before the City Council, Sallinger isn’t so sure of that.

“They like to cut deals behind the scenes,” Sallinger says of the port. “My hope is that the council will keep faith with the community.”